Abu-Ghazaleh Calls for Unified Arab Accounting Standards
21 Dec 1994Mr. Talal Abu-Ghazaleh, Chairman of the Arab Society of Certified Accountants (ASCA), emphasized the importance of having unified accounting standards, pointing out to the fact that the accounting profession in the Arab world is still below the required level of development needed.
At a conference on global accounting standards organized by Infocenter International in collaboration with Talal Abu-Ghazaleh International convened in Dubai, Mr. Abu-Ghazaleh said:
“In your role as accountants and communicators of financial information, you are responsible for providing individuals and businesses with knowledge which they use to make decisions, often very important decisions. If this information is not clear, or if it is inaccurate or misleading, the consequences can be disastrous. As a member of the profession, it is distressing to me that as yet there are no uniform accounting principles and practices in the Middle East. This is inhibiting the Arab region’s economic development. I will also be so blunt as to address and raise the issue of whether we really want to have uniform accounting standards. It actually can serve the interests of both businesses and some accountants to have no common standards, as this allows a business the ability to hide behind impenetrable accounting statements, and allows accountants and accounting firms to avoid meeting stringent criteria in personnel and reporting matters. Of course when I say “We,” I do not refer to you or myself, but to our colleagues and partners throughout the various Arab countries. As I have said by the fact that you are here today, I know that you will agree with me that there is an imperative need to adopt the international accounting standards in the Arab world. What we need to do is work harder and faster, to convince all those with whom we work in our profession, that this is in the interest of the Arab world as a whole.”
He explained that accounting standards customarily used in the Arab world are largely taken from the accounting standards traditionally used in the USA, the UK and some Arab countries, yet there is no widespread concurrence on the explanation of these standards or how to use them. He added “Of course, the main purpose of adopting international accounting standards is to facilitate international understanding and acceptance of accountants’ reports on the financial status of companies and institutions. This need has not yet been met. If there is any one thing that will contribute to the long term economic viability of the Arab region, it will be our competitiveness in the global arena for inward investment and technology transfer. Some people think of inward investment and technology transfer as something that occurs between a First World country and a Third World country; while that is true, it is not the entire story. In today’s competitive world, technology transfer and even attraction of inward investment, can characterize the relations between members of First World countries as well. But to service theses developments we need to create the business infrastructure necessary to make it happen.”
Mr. Abu-Ghazaleh pointed out that the accounting profession in the Arab world is underdeveloped, stating “This needs to be changed. There are many roots to the situation, some of which wind their way back to the era of colonialism, others to flirtations and experimentation with socialism and state control of industry, and the consequent constraints on development of the modern accounting profession.”
Abu-Ghazaleh elaborated that numerous Arab countries set continuous education requirements for accountants, yet despite the speed with which new developments now occur in the discipline, accounting education makes no effort to incorporate the role of new technology, or the wide range of roles that modern accountants are expected to play in today’s business environment. According to him, one of the reasons for this is there is no organized and effective accounting profession currently that takes the responsibility to address these obstacles. Here, “this is where the role of the Arab Society of Certified Accountants (ASCA) becomes clear,” according to Chairman Abu-Ghazaleh.
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